TEST ONE STUDY GUIDE

TEST ONE STUDY GUIDE - TEST ONE STUDY GUIDE: FIN321 Study...

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TEST ONE STUDY GUIDE: FIN321 Study the Federal Reserve PowerPoint with particular attention to the Fed’s policy tools, mandate, quantitative easing, and the balance sheet expansion and make-up. (7 questions) o Fiscal Policy: Passing legislation on spending, taxes, regulations, or new programs. o Monetary Policy: The Federal Reserve targets interest rates, money supply, banking regulation, reserve requirements and is the lender of last resort. o Dual Mandate Maximize Employment Promote Price Stability o Quantitative Easing – Typically the Fed lowers the over night rate, since the short term interest rates are at zero, the Fed can’t lower them anymore. The multiplier effect has stopped working, the velocity of money decreased, so their quantitative easing is not working. The Fed is now purchasing assets (treasury note/bonds, etc). o Balance Sheet Expansion – The use of federal reserve assets has increased tremendously. Their spending varies from Short term lending, Lending to nonbank credit markets, treasuries,
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This note was uploaded on 02/22/2012 for the course ACC 311 taught by Professor Crampton during the Winter '11 term at Jacksonville College.

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TEST ONE STUDY GUIDE - TEST ONE STUDY GUIDE: FIN321 Study...

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